The Schwartz Report

Microsoft's NFL Surface Deal: Touchdown or Hail Mary?

Microsoft has extended its relationship with the NFL in a new deal for its Surface Pro 3 tablet-PCs to be used by coaches on the sidelines during games. Viewers of NFL games this season will prominently see team personnel and coaches using Surface Pro 3 devices to review images of plays on screen rather than on printed photos.

The NFL struck a deal last year with Microsoft for the Surface to be the league's official tablet. Now a new $400 million deal calls for Surface Pro 3s to be used on the sidelines during games. The arrangement calls for coaches to use the Surface Pro 3s for five years, according to a Wall Street Journalblog post.

Microsoft said the Surface devices used by teams are equipped with the Sideline Viewing System (SVS). The app, developed by Microsoft, picks up the same digital feed previously sent to the printers. By replacing the printouts with digital images sent to the tablets, coaches will get them faster (four to five seconds versus 30 seconds) and have the ability to use the high resolution touch display to zoom in on a portion of the image and make annotations, Microsoft said.

While coaches will be able to receive images, the tablets won't have access to the public Internet and team personnel won't be permitted to use the devices to take photos or videos during games. It remains to be seen whether teams in future seasons will use the Surface Pro 3s for making play-by-play decisions.

Perhaps more telling will be whether the promotional value of this deal will boost sales of the Surface line of tablets. Certainly with the vast viewership of NFL games it's a nice boost. But as Computerworldreported Monday, Microsoft's losses on Surface have swelled to $1.7 billion since their 2012 launch, according to a July 22 8-K statement. The publication also calculated that Microsoft saw a loss of $363 million for the last fiscal quarter. That makes it the largest quarterly loss for the tablets since the company began reporting revenues for them. Hence, Microsoft needs to score many more deals like this to keep the Surface in the game.

What's your take on this deal? Did Microsoft score big or was this just a Hail Mary pass?